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TMI Blog2014 (10) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... : Mr Tushar P Hemani, Adv. Ms Vaibhavi K Parikh, Adv JUDGMENT (Per : Honourable Mr. Justice KS Jhaveri ) 1. Being aggrieved and dissatisfied with the impugned judgment and order passed by the Income Tax Appellate Tribunal, Rajkot Bench (hereinafter referred to as ITAT) dated 20.08.2002 in ITA No. 704/Rjt/2002 for the Assessment Year 1994-95, the revenue has preferred the present Tax Appeal for consideration of the following substantial question of law: Whether, the Appellate Tribunal was right in law and on facts in allowing the deduction u/s 80-IA to the assessee, holding that ship breaking activity gives rise to manufacturing and production of altogether a new article or thing? 2. The assessee firm is engaged in the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons: 8. Firstly, in the case of Ship Scrap Traders v. CIT [2001] 251 ITR 806, the Bombay High Court has analysed the entire ship breaking activity, the articles which emerged from that activity, the various steps which are required to be undertaken for ship breaking activity and, consequently, after placing reliance on the judgment of this Court in NC Budharaja Co. s case, it has held that the ship breaking activity resulted in production of articles which emerged when the ship breaking activity stood undertaken. In our view, the important test which distinguishes the word production from manufacture is that the word production is wider than the word manufacture as held in N.C. Budharaja Co. s case. Further, it is true that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has been specifically rejected in Sesa Goa Ltd. s case. 10. For the aforestated reasons, therefore, we are of the view that the Tribunal in the present case was right in allowing the deduction under sections 80HH and 80-I to the assessee holding that the ship breaking activity gave rise to the production of a distinct and different article. Accordingly, the said question is answered in favour of the assessee and against the Department. 5.1. It is submitted that in the aforesaid decision the Honble Supreme Court has held that ship breaking activity gave rise to the production of a distinct and different article and therefore the assessee is entitled to deduction under sections 80HH and 80-I of the Act. 6. Mr. Manish Bhatt, learn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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